1.In June 2009, Apple Computer had no debt, total equity capitalization of $128 billion, and a (equity) beta of 1.7 (as reported on Google Finance). Included in Apple’s assets was $25 billion in cash and risk-free securities. Assume that the risk-free rate of interest is 5% and the market risk premium is 4%.
a. What is Apple’s enterprise value?
b. What is the beta of Apple’s business assets?
c. What is Apple’s WACC?